A good BDC definition primer

http://blah.winsmarts.com/2007-4-SharePoint_2007__BDC_-_The_Business_Data_Catalog.aspx

BDC configuration example using userid and password in connection string

Paul Galvin shows us a work around so you can pass the userid and password for a connection in a BDC definition file.

http://paulgalvin.spaces.live.com/Blog/cns!1CC1EDB3DAA9B8AA!320.entry?cd9886e8